The Energy Center of Expertise

Transcription

1 The Business Opportunities with the GSA Energy Center Gov Energy 2007 New Orleans, LA

2 Introduction: GSA Public Buildings Service GSA acts as a Government asset owner GSA owns 1,600 buildings and leases 7,100 buildings totaling 339 million sq.ft. GSA PBS has approx. 5,500 employees GSA facilitates the procurement of Federal energy services across a $5 billion market

3 Government-Wide Responsibility for Regulated Utility Procurement Natural Gas Acquisition Program Deregulated Electricity Procurement Renewable Energy Energy Retrofit Program Advanced Metering Alternative Financing

4 Government-Wide Regulated Utilities GSA is authorized by sec. 201 of the Federal Property and Administrative Services Act of 1949, as amended (40 U.S.C.481), to prescribe policies and methods governing the acquisition and supply of utility services for Federal agencies. This authority includes related functions such as managing public utility services and representing Federal agencies in proceedings before Federal and state regulatory bodies. GSA is authorized by section 201 of the Act to contract for utility services for periods not exceeding ten years.

5 FAR FAR Part GSA will, upon request, provide technical and acquisition assistance, or will delegate its contracting authority for the furnishing of utility services for any Federal agency.

6 Areawide Utility Contracts GSA Energy Center maintains contracts with 120 regulated public utility companies for use by GSA and other Agencies. Provides guidance and assistance to customer Agencies. Some contracts include ability to perform demand reducing energy projects.

7 Energy Market Overview Nationally, fundamental division between restructured (i.e. deregulated) and nonrestructured states Retail customers in restructured states can select electric suppliers other than the local utility including renewable products Retail customers in fully regulated states are required to purchase electric supply from the local utility

8 Natural Gas Acquisition Program Provides deregulated natural gas services to the burner-tip, not just the city gate Manages contracts for supply for multiple Agencies Purchases gas as a commodity through a reverse-auction platform, obtaining the lowest possible price on the open market

9 Natural Gas Acquisition Program Contracting office that acts quickly to respond to the requirements of the market Works with customers to insure the Government is getting what it is paying for Provides expertise in working with local distribution companies (LDCs)

10 NGAP Services Procurement NGAP uses reverse auctions to: Structure bid price by LDC rate class, Federal agency, etc. Creative maximum price competition Secure the lowest price that meets government requirements Firm Fixed Price with 10% up/down tolerance Index based option tied to Henry Hub Shorten time to award (same day or within 24 hours) This results in savings for NGAP Customers!

11 Supplier 1 bids Supplier 2 enters lower price Supplier 4 enters lower price Supplier 2 sets new low price Supplier 1 wins auction

12 2006 Auction Recap (1) Despite obstacles, a number of large accounts have been added to NGAP over the past four years with total annual usage exceeding 1.5M dths. The program continues to grow and bid prices received for the Fixed Price Product continue to be very competitive even in volatile markets based on shortened award times and GSA s responsiveness to supplier concerns. Even with adding the requirement to the 2006 Solicitation that bidders must provide letters of credit / insurance to cover the anticipated value of the volumes they plan to bid; GSA added four new suppliers and had 19 bid in all. We have less suppliers on the program than 2004 (19 vs. 28) ; however, these suppliers met more stringent credit requirements than those that defaulted in the past such as: Nicole, TBC, Geary, Select Natural Gas, etc. and the same number of suppliers were awarded contracts (18)

13 2006 Auction Recap (2) GSA made $242M in contract awards and achieved the following in 2006: Received over 1,000 bids from 19 qualified suppliers and made awards to 18 suppliers serving accounts in 60 utilities GSA awarded contracts serving 303 Federal accounts located in all 11 GSA Regions Added 16 accounts with combined annual usage of 573K dths and expanded the program to three new states (IA, ID, and WY) Awards made to four new suppliers: E Services, Enspire Energy, Oneok Energy Marketing, and Sprague Energy Corp.

14 Auction Results Assisted GSA in purchasing natural gas for customers in 29 States between July 2002 and June 2006 Continuous updates to GSA supply solicitation and the procurement process based on lessons learned, supplier feedback and NGAP recommendations Result Over 3,500 bids submitted by 35 qualified suppliers Increased the number of serving suppliers from 2 to 29 $451M in natural gas supply contract awards Fixed price, Index Plus Baseload, and Full Index awards made Over 20 Federal Agencies Served including: EPA, UN, FAA, TSA, GSA, USDA, VA, BOP, and National Archives No successful protests in four years of auctions

15 NGAP Map - Active Contracts 2006 Active Contracts in 28 States: AZ, CA, CO, CT, DC, DE, FL, GA, IA, ID, IL, IN, KY, MA, MD, MI, MO, NJ, NM, NY, OH, OK, PA, TX, VA, WA, WI, WV

16 NGAP Map (cont) Volume by State NGAP volumes under management vary greatly by state making it unlikely that any single supplier can /will bid on all accounts

17 NGAP Map (cont) Suppliers by State The number of suppliers bidding through NGAP in each state corresponds closely to the associated volumes in each state

18 Supplier Base by State & Awards SUPPLIER STATES SUPPLIER BID IN AWARD VOLUME Enspire Energy (DC, MD, VA) 4,713.7M Dths Sage Energy Trading, LLC (CO, IA, IL, KY, MI, MO, NM, OH, OK, TX, UT, WI, WY) 4,524.3M Dths Amerada Hess (DC, DE, MD, NJ, NY, OH, PA, VA, WV) 4,174.6 Dths Energy USA - TPC Corporation (IL, IN, MI, OH) 2,258.2M Dths Coral Energy (CA, CO, WA) 2,211.3M Dths Wasatch Energy LLC (AZ, CA, Co, ID, NM, UT, WA) 1,296.4Dths Interconn Resources, Inc. (DE, FL, GA, IA, IL, KY, MD, MI, MO, VA, WV) 1,167.2K Dths Seminole Energy (CO, MI, OH, OK, TX) 709.3K Dths E-Services (OH, VA) 690.7K Dths UGI Energy Services, Inc. (PA) 506.1K Dths PS Energy Group, Inc (GA, MD, VA) 468.2K Dths NOCO Energy Corporation (NY, PA, WV) 426.7K Dths PEPCO Energy Services (DC, MD, PA, VA) 421K Dths Select Energy (CT, DC, MA, MD, NJ) 288.1K Dths Sprague Energy Corp. (MA, MD, NJ, NY, PA) 152.3K Dths Crown Energy Services (PA) 118.9K Dths Oneok Energy Marketing (OK, TX) 83.9K Dths FPL Energy Power Marketing (FL) 32.6K Dths Atmos Energy Marketing (IL, IN, KY, OH, TX) 0 Dths

19 De-regulated Electricity Purchases The Energy Center takes advantage of competitive electricity markets to provide better value to customers throughout the government Competitive procedures are also used to procure renewable electricity for multiple customers

20 De-Regulated Electricity Contracting office that acts quickly to respond to the requirements of the market Takes advantage of aggregating customers to obtain the best value Flexible contracts some have built-in market-based demand response

21 TOTAL TOTAL AVG. LOCATION CONTRACTOR ANNUAL KWH ANNUAL $ $/KWH DC - PEPCO Pepco Energy Svcs 1,900,000,000 $181,735,000 $ MD - PEPCO Pepco Energy Svcs 500,000,000 $46,900,000 $ Baltimore Pepco Energy Svcs 225,000,000 $20,815,000 $ MD - Allegheny Integrys 21,709,000 $1,726,000 $ Pittsburgh Duquesne Light Energy 57,000,000 $3,648,000 $ New Jersey Pepco Energy Svcs 65,283,000 $7,000,000 $ New York City area Hess Corp. 226,268,000 $27,808,000 $ New York City area Pepco Energy Svcs 76,937,000 $10,871,000 $ New York City area ConEdison Solutions 15,100,000 $1,965,000 $ New York City area SUEZ Energy 174,000 $24,000 $ Upstate NY Pepco Energy Svcs 2,548,000 $219,000 $ Upstate NY ConstellationNewEnergy 36,000,000 $3,035,000 $ Upstate NY Hess Corp. 73,400,000 $7,248,000 $ MA (large acct) Hess Corp. 271,814,000 $28,673,000 $ Maine & Conn. TransCanada Power Mkt 58,426,000 $5,775,000 $ Chicago Area Pepco Energy Svcs 165,000,000 $9,970,000 $ Chicago Area Exelon 10,485,000 $658,000 $ TX Oncor SUEZ Energy 120,139,000 $10,870,000 $ TX Centerpoint SUEZ Energy 74,284,000 $6,860,000 $ TX TXU SUEZ Energy 40,175,000 $3,535,000 $ So Illinois ConstellationNewEnergy 61,000,000 $4,350,000 $ TOTALS 4,000,742,000 $383,685,000 $0.0959

22 Electric Restructuring Map Blue States Implementing Competition (VA has rescinded restructuring)

23 Purchasing Market Research Federal Govt. must purchase electricity in accordance with state laws governing provision of electric service (FAR (d)(1)) Analysis of state s electric regulations is key Most states do not allow the purchase of electric supply from other than the regulated utility (see previous map) Every state that allows competition has somewhat different rules and terms

24 GSA Solicitation Features Indefinite quantity indefinite delivery requirements contract Generally some form of fixed price Exploring a block and index pricing approach A supply (not a service) Delivery to local utility s system Bandwidth language (plus or minus 10-15% typical) Change in regulation and taxes addressed

25 GSA Solicitation Features Term 1 to 5 years Billing consolidated bill or dual bill Difficult to price option years Must provide suppliers with complete account usage info Minimum renewable power percentage

26 GSA Pricing Price an aggregate group of accounts under a single price that applies to all (aggregate price) Pricing on an individual account basis Tend to obtain aggregate pricing on rate schedule/rate class basis but individual account pricing can be effective as well

27 GSA Pricing Several forms of firm, fixed price Mimic the utility s pricing structure (makes for easy comparison) for your rate class Flat $/kwh price Time of use pricing Fixed margins in block and index approach Must act on prices quickly within trading day

28 GSA Pricing GSA uses 2 ways of obtaining prices Old Fashioned method where firms fax in prices to GSA for evaluation Reverse Auction Process - internet based interactive platform where suppliers bid against each other to offer lowest price Prices remain good for about 4 hours in each approach Both pricing approaches have proven effective for GSA

29 Renewable Energy Issues solicitations on behalf of GSA and non GSA customers Purchased delivered energy and/or Renewable Energy Certificates

30 Energy Retrofit Program Congressional annual appropriations Regions develop projects and submit to Energy Center If life cycle cost effective, projects are ranked for funding Funded projects are competed at regional level.

31 Advanced Metering National guidance issued to regions on what constitutes an acceptable advanced meter Funding coordination and allowance similar to energy retrofit program Tie-in to national software analysis system

32 Alternative Financing ESPC Business case decision matrix UESC Definition of DSM Technical approval Tracking and reporting of projects

33 Energy Services Associated with Retrofits and Metering Effort PBS, through its Regional Offices, awards contracts to architectural and engineering firms for the design and engineering of mechanical and electrical systems, and for renovation and restoration of existing buildings within their geographic boundaries. GSA acquires A/E services based on evaluation in accordance with published criteria, demonstrated competence and qualifications for the type of professional services required. GSA awards to the most technically qualified firm, after negotiation of a fair and reasonable price. A/E firms who have been awarded prime PBS contracts general subcontract other design-related services

34 Contract Advertisements GSA FedBizOpps Provides vendor access to agency business opportunities 24 hours per day, seven days a week Allows for automatic notification of opportunities

35 Full and Open Competition All deregulated energy contracts are not restricted Utilize full and open competition Industry feedback through pre-proposal conferences Continuous industry input via reverse auction process Two step proposal process with technical qualifications preceding price competition

36 Conclusion Questions and Comments?